Wadia's Assets Sold; Kinergetics Research Folds
As majority shareholder, Shared Ventures controlled the stock of Wadia but did not own the company—a distinction probably incomprehensible to most people outside the legal profession. Owning stock gives shareholders a voice in the operation of a company and certain rights regarding the election of officers to its board of directors, but does not give them the rights to any proprietary intellectual property or brand name. For Shared Ventures, acquiring Wadia's assets and name is the first step toward recovering some value from Wadia by subsequently selling it to another manufacturer or startup venture, who can then legally use Wadia designs. Whether minority shareholders will be able to recover any investments they made in the company isn't clear from the information available as of September 14.
The return of Wadia as a force in the High End is expected as a result of the acquisition, according to a reliable source, but audiophiles should not expect to see any new Wadia products until the assets (brand name, designs, patents) find a new home with a manufacturing concern. Shared Ventures is said to be "working aggressively to sell the assets of the company in such a way as to revive the Wadia brand in the marketplace."
No mention was made of the immediate fate of loudspeaker manufacturer Hales Design Group, which was acquired by Wadia late last year. As part of Wadia, Hales, too, is now owned by Shared Ventures, which will presumably want to extract maximum value from the Hales brand name and designs as well.
Wadia digital products have long been audiophile favorites. Two of the company's CD players, the 860x and 850, and the 270 CD transport, were listed in "Class A" of Stereophile's "Recommended Components" as recently as April 2000. The Wadia 27ix D/A converter won an "A+" ranking in the same issue. Unfortunately, the company's marketing efforts never matched its engineering excellence.
Another company whose marketing failed to keep pace with its engineering advancements was Kinergetics Research, which quietly closed its doors in August. (As of September 14, no official notice had been posted on the company's website.) In a telephone interview, company president and former owner Tony DiChiro said that sales had been falling for a long time before KR's financial backers decided to pull the plug. DiChiro attributed the company's shutdown to "a shrinking market for high-quality two-channel audio," exemplified by the difficulties of other specialty audio companies such as Wadia and the demise of publications like Fi and Audio. Declining demand for two-channel products led KR to develop products for home theater and multichannel applications, a segment of the market that sustained the company during its last couple of years in business.
Kinergetics Research enjoyed a 20-year run as a leader in the audio industry. The company, which grew out of a group formed in July 1970 to do engineering development work for the aerospace and undersea exploration industries, began designing and manufacturing audio equipment in 1979. While they were in production, KR's KCD-20 and KCD-40 CD players were considered among the best. The KCD-40 boasted a jitter figure "seven times lower than anything else on the market at the time," according to DiChiro. KR pushed digital audio technology forward with its pioneering use of parallel signal paths and parallel DACs for lower noise and distortion, a technique now common among upper-tier designs. The company also made early progress with noise-canceling circuitry, introduced the first DTS decoder and the first digital "auto detect" circuit, and was the first to incorporate direct commands into a remote control, DiChiro said.
Other than a few pieces in the hands of dealers and sales reps, there is no remaining Kinergetics Research inventory. DiChiro himself has moved on, and is now developing digital processors and preamps as a consulting engineer for other manufacturers. Fred Pham, a longtime Kinergetics Research technician and assistant designer, will handle repairs of existing KR products. Pham can be reached via e-mail or by telephone at (310) 408-7597.